##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 Annual Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934For the Fiscal Year Ended: December 31, 2009
 Commission File No. 0-50764
 CapTerra Financial Group, Inc.
 (Exact Name of Issuer as specified in its charter)
 Colorado
    
    20-0003432(State or other jurisdiction
    
    (IRS Employer File Number)of incorporation)1440 Blake Street, Suite 310Denver, Colorado
    
    80202(Address of principal executive offices)
    
    (zip code)
 (303) 893-1003  (Registrants telephone number, including area code)
 None   Common Stock, $0.001 per share par value
 Yes o No þ
 Yes o No þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller Reporting Company þ
 o þ




---



##### 



FORM 10-K   INDEX
 PART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    6Item 2. Property
    
    
    11Item 3. Legal Proceedings
    
    
    11Item 4. Submission of Matters to a Vote of Security Holders
    
    
    12PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    13Item 6. Selected Financial Data
    
    
    15Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    15Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 8. Financial Statements and Supplementary Data
    
    
    23Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosures
    
    
    36Item 9A(T). Controls and Procedures
    
    
    37Item 9B. Other Information
    
    
    38PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    39Item 11. Executive Compensation
    
    
    40Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    42Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    43Item 14. Principal Accountant Fees and Services
    
    
    44Item 15. Exhibits Financial Statement Schedules
    
    
    44Signatures
    
    
    47Exhibit 21Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




---



##### Table of Contents



PART I
 
 ITEM 1.
    
    DESCRIPTION OF BUSINESS.
 NARRATIVE DESCRIPTION OF THE BUSINESS
 General
  Organization
   OPERATIONS
      3




---



##### Table of Contents



Funding:
  Subordinated Notes:
   Senior Credit Facilities:
 United Western Bank:
   4




---



##### Table of Contents



MARKETS
  CUSTOMERS AND COMPETITION
  EMPLOYEES
  GOVERNMENT REGULATION
     5




---



##### Table of Contents



ENVIRONMENTAL COMPLIANCE
  HOW TO OBTAIN OUR SEC FILINGS
   
 ITEM 1A.
    
    RISK FACTORS
      
    
    our ability to find suitable real estate projects; and
    
    our ability to generate sufficient revenues from those projects.
  6




---



##### Table of Contents




    
    increase our vulnerability to general adverse economic and industry conditions;
    
    require us to dedicate a substantial portion of our cash flow from operations
to payments on our indebtedness if we do not maintain specified financial
ratios, thereby reducing the availability of our cash flow for other purposes;
or
    
    limit our flexibility in planning for, or reacting to, changes in our business
and the industry in which we operate, thereby placing us at a competitive
disadvantage compare to our competitors that may have less indebtedness.
  7




---



##### Table of Contents




    
    incur additional indebtedness;
    
    make capital expenditures and other investments above a certain level;
    
    merge, consolidate or dispose of our assets or the capital stock or assets of any subsidiary;
    
    pay dividends, make distributions or redeem capital stock in certain circumstances;
    
    enter into transactions with our affiliates;
    
    grant liens on our assets or the assets of our subsidiaries; and
    
    make or repay intercompany loans.
    8




---



##### Table of Contents



9




---



##### Table of Contents




    
    actual or anticipated fluctuations in our operating results;
    
    change in financial estimates by securities analysts or our failure to perform in line with such estimates;
  10




---



##### Table of Contents




    
    changes in market valuations of other real estate oriented companies, particularly those that market
services such as ours;
    
    announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships,
joint ventures or capital commitments;
    
    introduction of technologies or product enhancements that reduce the need for our services;
    
    the loss of one or more key customers; and
    
    departures of key personnel.
       
 ITEM 2.
    
    DESCRIPTION OF PROPERTY.
  
 ITEM 3.
    
    LEGAL PROCEEDINGS.
   11




---



##### Table of Contents



ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  1.
    
    The reelection of three members to our Board of Directors, each to hold office until
the 2010 Annual Meeting and until his respective successor is elected and qualified;2.
    
    The approval and ratification of the 2008 Equity Compensation Plan; and3.
    
    The approval and ratification of Erhardt, Keefe, Steiner, Hottman, P.C. as our
independent auditors for the fiscal year ending December 31, 2009.
  12




---



##### Table of Contents



ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES.
 Market
   Closing Price2009
    
    High
    
    
    LowFirst Quarter
    
    $
    1.98
    
    
    $
    .05Second Quarter
    
    $
    .51
    
    
    $
    .05Third Quarter
    
    $
    1.00
    
    
    $
    .05Fourth Quarter
    
    $
    1.00
    
    
    $
    .05
 Closing Price2008
    
    High
    
    
    LowFirst Quarter
    
    $
    2.40
    
    
    $
    1.20Second Quarter
    
    $
    1.20
    
    
    $
    .80Third Quarter
    
    $
    2.00
    
    
    $
    .40Fourth Quarter
    
    $
    1.50
    
    
    $
    .90
  Approximate Number of Holders of Common Stock
  The Securities Enforcement and Penny Stock Reform Act of 1990
   13




---



##### Table of Contents




    
    contains a description of the nature and level of risk in the
market for penny stocks in both public offerings and secondary
trading;
    
    contains a description of the brokers or dealers duties to the
customer and of the rights and remedies available to the customer
with respect to a violation to such duties or other requirements
of the Securities Act of 1934, as amended;
 
    
    contains a brief, clear, narrative description of a dealer market, including bid
and ask prices for penny stocks and the significance of the spread between the
bid and ask price;
    
    contains a toll-free telephone number for inquiries on disciplinary actions;
    
    defines significant terms in the disclosure document or in the conduct of trading
penny stocks;
    
    contains such other information and is in such form (including language, type,
size and format) as the Securities and Exchange Commission shall require by rule
or regulation;
  
    
    the bid and offer quotations for the penny stock;
    
    the compensation of the broker-dealer and its salesperson in the transaction;
    
    the number of shares to which such bid and ask prices apply, or other comparable
information relating to the depth and liquidity of the market for such stock; and
    
    monthly account statements showing the market value of each penny stock held in the
customers account.
   14




---



##### Table of Contents



Equity Compensation Plan Information
  Number of securitiesremaining available forNumber of securities
    
    
    Weighted average
    
    
    future issuance underto be issued upon
    
    
    exercise price of
    
    
    equity compensationexercise of outstanding
    
    
    outstanding options,
    
    
    plans (excluding securitiesPlan Category
    
    options, warrants and rights
    
    
    warrants and rights
    
    
    reflected in column (a))Equity compensation plan approved
by security shareholders
    
    
    1,566,158
    
    
    $
    0.49
    
    
    
    1,133,842
 Stock Transfer Agent
  Dividend Policy
  
 ITEM 6.
    
    SELECTED FINANCIAL DATA
  
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Forward-Looking Statements
   15




---



##### Table of Contents



Overview and History
          16




---



##### Table of Contents



Results of Operations
      17




---



##### Table of Contents



Liquidity and Capital Resources
       18




---



##### Table of Contents



Recently Issued Accounting Pronouncements
      Seasonality
   19




---



##### Table of Contents



Critical Accounting Policies
       .
   20




---



##### Table of Contents



ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
   21




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
  22




---



##### Table of Contents



ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
   December 31,
    
    
    December 31,2009
    
    
    2008AssetsCash and equivalents
    
    $
    496,943
    
    
    $
    2,383,740Accounts receivable, net
    
    
    16,992
    
    
    
    218,357Notes receivable
    
    
    3,604,646
    
    
    
    2,343,732Property and equipment, net of accumulated depreciation
    
    
    9,048
    
    
    
    39,432Real estate held for sale
    
    
    14,096,592
    
    
    
    17,333,027Deposits and prepaids
    
    
    53,253
    
    
    
    52,436Total assets
    
    $
    18,277,474
    
    
    $
    22,370,724Liabilities and Shareholders DeficitLiabilities:Accounts payable
    
    $
    77,860
    
    
    $
    38,414Accrued liabilities
    
    
    94,035
    
    
    
    128,944Senior subordinated revolving notes, related parties
    
    
    22,614,259
    
    
    
    20,802,247Notes payable
    
    
    6,014,895
    
    
    
    7,330,652Total liabilities
    
    
    28,801,049
    
    
    
    28,300,257Shareholders deficit:Common stock, $.001 par value; 50,000,000 shares authorized,
23,602,614 issued and outstanding December 31, 2009 and 2008
    
    
    23,603
    
    
    
    23,603Additional paid-in-capital
    
    
    16,290,950
    
    
    
    16,024,577Accumulated deficit
    
    
    (26,838,128
    )
    
    
    (21,977,713
    )Total shareholders deficit
    
    
    (10,523,575
    )
    
    
    (5,929,533
    )Total liabilities and shareholders deficit
    
    $
    18,277,474
    
    
    $
    22,370,724
   23




---



##### Table of Contents



For the years endDecember 31,2009
    
    
    2008Revenue:Sales
    
    $
    2,242,151
    
    
    $
    4,381,723Interest income and fees
    
    
    613,418
    
    
    
    124,509Rental income
    
    
    469,951
    
    
    
    293,476Total revenue
    
    
    3,325,520
    
    
    
    4,799,708Operating expenses:Cost of sales
    
    
    2,223,776
    
    
    
    4,349,585Impairment loss on real estate
    
    
    2,243,007
    
    
    
    8,030,002Bad debt
    
    
    251,717
    
    
    
    629,283Conversion expense
    
    
    
    
    
    
    2,518,750Selling, general and administrative
    
    
    1,835,244
    
    
    
    2,590,925Total operating expenses
    
    
    6,553,744
    
    
    
    18,118,545Loss from operations
    
    
    (3,228,224
    )
    
    
    (13,318,837
    )Non-operating income/(expense):Interest income
    
    
    6,437
    
    
    
    9,543Loss on fixed assets
    
    
    (8,877
    )
    
    
    (50,265
    )Interest expense
    
    
    (1,633,173
    )
    
    
    (1,324,805
    )Other expense
    
    
    3,422
    
    
    
    (17,618
    )Loss before income taxes
    
    
    (4,860,415
    )
    
    
    (14,701,982
    )Income tax provision
    
    
    
    
    
    
    8,611Net loss
    
    $
    (4,860,415
    )
    
    $
    (14,710,593
    )Preferred stock dividends
    
    
    
    
    
    
    (154,675
    )Net loss available to common shareholders
    
    $
    (4,860,415
    )
    
    $
    (14,865,268
    )Basic and diluted loss per common share
    
    $
    (0.21
    )
    
    $
    (0.94
    )Basic and diluted weighted average common shares outstanding
    
    
    23,602,614
    
    
    
    15,810,463
   24




---



##### Table of Contents



Preferred Stock
    
    
    Common Stock
    
    
    AdditionalNon-controlling
    
    
    
    
    
    
    Par
    
    
    
    
    
    
    Par
    
    
    Paid-in
    
    
    AccumulatedInterest
    
    
    Shares
    
    
    Value
    
    
    Shares
    
    
    Value
    
    
    Capital
    
    
    Deficit
    
    
    TotalBalance at December 31, 2007
    
    $
    4,594
    
    
    
    517,000
    
    
    $
    51,700
    
    
    
    8,018,313
    
    
    $
    8,018
    
    
    $
    6,448,417
    
    
    $
    (7,112,446
    )
    
    $
    (599,717
    )Non-controlling interest at
    
    
    (4,594
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,594
    )December 31, 2008Stock option compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,710
    
    
    
    
    
    
    
    48,710Accrued preferred stock dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (154,674
    )
    
    
    (154,674
    )Debt and equity recapitalization
    
    
    
    
    
    
    (517,000
    )
    
    
    (51,700
    )
    
    
    15,584,301
    
    
    
    15,585
    
    
    
    9,527,450
    
    
    
    
    
    
    
    9,491,335Net loss, year ending
December 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,710,593
    )
    
    
    (14,710,593
    )Balance at December 31, 2008
    
    $
    0
    
    
    
    0
    
    
    $
    0
    
    
    
    23,602,614
    
    
    $
    23,603
    
    
    $
    16,024,577
    
    
    $
    (21,977,713
    )
    
    $
    (5,929,533
    )Stock option compensation and warrant expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    266,373
    
    
    
    
    
    
    
    266,373Net loss, for the year ending
December 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,860,415
    )
    
    
    (4,860,415
    )Balance at December 31, 2009
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    23,602,614
    
    
    $
    23,603
    
    
    $
    16,290,950
    
    
    $
    (26,838,128
    )
    
    
    (10,523,575
    )
   25




---



##### Table of Contents



2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (4,860,415
    )
    
    $
    (14,710,593
    )Adjustments to reconcile net loss to net cash used by operating activities:Deferred income taxes
    
    
    
    
    
    
    8,611Depreciation and write-off of assets
    
    
    24,514
    
    
    
    84,882Impairment of real estate held for sale
    
    
    2,243,007
    
    
    
    8,030,002Allowance for bad debt and write-off of receivables
    
    
    
    
    
    
    (9,014
    )Note receivable allowance
    
    
    
    
    
    
    638,297Conversion expense
    
    
    
    
    
    
    2,518,750Stock based compensation expense
    
    
    242,149
    
    
    
    48,709Warrant expense
    
    
    24,224
    
    
    
    Minority interest
    
    
    
    
    
    
    (4,594
    )Changes in operating assets and operating liabilities:Construction in progress
    
    
    
    
    
    
    2,484,179Real estate held for sale
    
    
    993,428
    
    
    
    (10,964,427
    )Land held for development
    
    
    
    
    
    
    5,388,089Accounts receivable
    
    
    201,365
    
    
    
    (481,016
    )Notes receivable
    
    
    (1,260,914
    )
    
    
    (62,442
    )Deposits and prepaids
    
    
    (817
    )
    
    
    (3,985
    )Accounts payable and accrued liabilities
    
    
    4,537
    
    
    
    (511,435
    )Income tax assets and liabilities
    
    
    
    
    
    
    (8,611
    )Unearned revenue
    
    
    
    
    
    
    (522,841
    )Net cash (used in) operating activities
    
    
    (2,388,922
    )
    
    
    (8,077,439
    )Cash flows from investing activities:Cash collections on notes receivable
    
    
    
    
    
    
    449,925Proceeds from sale of property and equipment
    
    
    7,430
    
    
    
    Cash paid for property and equipment
    
    
    (1,560
    )
    
    
    (11,396
    )Net cash provided by investing activities
    
    
    5,870
    
    
    
    438,529Cash flows from financing activities:Preferred stock dividends paid
    
    
    
    
    
    
    (78,187
    )Proceeds from issuance of related party revolving notes
    
    
    2,327,012
    
    
    
    22,436,928Repayment of related party revolving notes
    
    
    (515,000
    )
    
    
    (15,985,966
    )Proceeds from issuance of notes payable
    
    
    
    
    
    
    3,991,948Repayment of notes payable
    
    
    (1,315,757
    )
    
    
    (2,377,693
    )Net cash provided by financing activities
    
    
    496,255
    
    
    
    7,987,030Net change in cash
    
    $
    (1,886,797
    )
    
    $
    348,120Cash and cash equivalents, beginning of the period
    
    $
    2,383,740
    
    
    $
    2,035,620Cash and cash equivalents, end of the period
    
    $
    496,943
    
    
    $
    2,383,740Supplemental disclosure of cash flow information:Cash paid during the year for:Income taxes
    
    $
    7,962
    
    
    $
    7,522Interest
    
    $
    
    
    
    $
    1,406,786Supplemental disclosure of non-cash investing and financing activitiesPerferred stock dividends declared but not paid
    
    $
    
    
    
    $
    6,817,912Conversion of accrued dividends to common stock
    
    $
    
    
    
    $
    154,674Conversion of accrued interest to related party note
    
    $
    1,527,965
    
    
    $
    
 *
    
    During 2008, the Company converted preferred stock of $51,700 and related party notes payable
of $6,972,587 into common stock. The Company issued $31,169 shares of common stock upon conversion.   26




---



##### Table of Contents



1) Nature of Organization and Summary of Significant Accounting Policies
 Organization and Basis of Presentation
  One-For-Two Reverse Stock Split
  Principles of Consolidation
   Name of Subsidiary Ownership
 Name of Subsidiary
    
    OwnershipSouth Glen Eagles Drive, LLC
    
    
    51
    %Hwy 46 and Bluffton Pkwy, LLC
    
    
    51
    %AARD LECA LSS Lonestar, LLC
    
    
    51
    %AARD LECA VL1, LLC
    
    
    51
    %AARD-Charmar Greeley, LLC
    
    
    51
    %AARD Charmar Greeley Firestone, LLC
    
    
    51
    %AARD-Econo Lube Stonegate, LLC
    
    
    51
    %Buckeye AZ, LLC
    
    
    51
    %AARD-Cypress Sound, LLC
    
    
    51
    %AARD Esterra Mesa 1, LLC
    
    
    100
    %CapTerra Fund I, LLC
    
    
    100
    %
  27




---



##### Table of Contents



Use of Estimates
   Cash and Cash Equivalents
  Accounts Receivable
  Fair Value of Financial Instruments
  Property, Equipment and Depreciation
  Construction in Progress, Land Held for Development and Real Estate Held for Sale
    28




---



##### Table of Contents



Fair Value on Real Estate
      Impairment and Disposal of Long-Lived Assets
  Income Taxes
  Revenue Recognition
   Earnings per Common Share
   29




---



##### Table of Contents



Going Concern
    Stock-Based Incentive Compensation Plans
  .
   30




---



##### Table of Contents



Subsequent Events
 Subsequent Events Subsequent Events
 Recently Adopted Accounting Pronouncements
     (2) Real Estate Held for Sale
    31




---



##### Table of Contents



(3) Related Party Transactions
  GDBA
    
    
    BOCO
    
    
    TotalSubordinated notes
    
    $
    8,046,066
    
    
    $
    14,231,899
    
    
    $
    22,277,965Accrued interest
    
    
    119,438
    
    
    
    216,856
    
    
    
    336,294Total senior subordinated revolving notes
    
    $
    8,165,504
    
    
    $
    14,448,755
    
    
    $
    22,614,259
 GDBA Investments, LLC
     BOCO Investments, LLC
    32




---



##### Table of Contents



(4) Notes Receivable and Development Deposits
    33




---



##### Table of Contents



(5) Shareholders Equity
 Preferred Stock
  Common Stock
  Warrants
       Stock Options
   34




---



##### Table of Contents



(6) Income Taxes
  2009
    
    
    2008Current:Federal
    
    $
    
    
    
    $
    State
    
    
    
    
    
    
    9,000
    
    
    
    9,000Deferred:Federal
    
    
    
    
    
    
    State
    
    
    
    
    
    
    
    
    
    
    Income tax expense (benefit)
    
    $
    
    
    
    $
    9,000
  2009
    
    
    2008Computed expected tax expense (benefit)
    
    $
    (1,653,000
    )
    
    $
    (4,999,000
    )Increase (reduction) in income taxes resulting from:
    
    
    
    
    
    
    State and local income taxes, net of federal impact
    
    
    (243,000
    )
    
    
    (726,000
    )Nondeductible differences
    
    
    
    
    
    
    2,000Change in valuation allowance
    
    
    1,917,000
    
    
    
    4,731,000Preferred Stock Conversion Expense
    
    
    
    
    
    
    982,000Terminated Stock Option Plan
    
    
    
    
    
    
    19,000Other nondeductibles
    
    
    (21,000
    )
    
    
    Income tax expense (benefit)
    
    $
    
    
    
    $
    9,000
  2009
    
    
    2008Impairment of asset
    
    $
    4,582,000
    
    
    $
    3,910,000Net operating loss and carry-forwards
    
    
    4,820,000
    
    
    
    3,147,000Allowance for Doubtful Accounts
    
    
    42,000
    
    
    
    305,000Partnership income
    
    
    (119,000
    )
    
    
    130,000Stock Compensation Expense
    
    
    104,000
    
    
    
    Origination Fee Income
    
    
    (85,000
    )
    
    
    (85,000
    )Fixed Assets
    
    
    (24,000
    )
    
    
    (3,000
    )Other temporary differences
    
    
    (66,000
    )
    
    
    (67,000
    )9,254,000
    
    
    
    7,337,000Valuation Allowance
    
    
    (9,254,000
    )
    
    
    (7,337,000
    )Total net deferred tax assets
    
    $
    
    
    
    $
    
        35




---



##### Table of Contents



(7) Notes Payable
    (8) Impairment of Assets
   
 ITEM 9.
    
    DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
   36




---



##### Table of Contents



ITEM 9A(T).
    
    CONTROLS AND PROCEDURES.
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  Managements Annual Report on Internal Control Over Financial Reporting.
     37




---



##### Table of Contents



Inherent Limitations Over Internal Controls
  Changes in Internal Control Over Financial Reporting.
  Attestation Report of the Registered Public Accounting Firm.
  
 ITEM 9B.
    
    OTHER INFORMATION.
   38




---



##### Table of Contents



PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
 Our Directors and Executive Officers, their ages and positions held with us as of March 16,
2010 are as follows:
 NAME
    
    AGE
    
    POSITION HELDJames W Creamer III
    
    
    45
    
    
    President and Chief Executive OfficerJoni K. Troska
    
    
    50
    
    
    Chief Financial Officer and SecretaryG. Brent Backman
    
    
    69
    
    
    DirectorEric Balzer
    
    
    61
    
    
    DirectorJoseph C. Zimlich
    
    
    50
    
    
    Director
  Mr. Creamer
 Ms. Troska
 Mr. Backman
  39




---



##### Table of Contents



Mr. Balzer
 Mr. Zimlich
 Compliance with Section 16(a) of the Securities Exchange Act of 1934
   
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  NonqualifiedNon-Equity
    
    
    DeferredStock
    
    
    Option
    
    
    Incentive
    
    
    Compensation
    
    
    All OtherName & Principal Position
    
    
    
    
    
    Salary ($)
    
    
    Bonus ($)
    
    
    Awards ($)
    
    
    Awards ($)
    
    
    Compensation ($)
    
    
    Earnings ($)
    
    
    Compensation ($)
    
    
    Total ($)Peter Shepard (1)
    
    
    2009
    
    
    
    20,713
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,7132008
    
    
    
    172,333
    
    
    
    35,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    207,333James W. Creamer III (2)
    
    
    2009
    
    
    
    147,500
    
    
    
    
    
    
    
    
    
    
    
    354,363
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    501,863Chief Executive Officer
    
    
    2008
    
    
    
    120,000
    
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,0002007
    
    
    
    120,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,000Joni K. Troska (3)
    
    
    2009
    
    
    
    95,250
    
    
    
    
    
    
    
    
    
    
    
    70,873
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    166,123Chief Financial Officer
 (1)
    
    Mr. Shepard became our President February 27, 2008 and received a salary of $235,000 and
was eligible for an annual bonus by our Board of Directors. In December 2008 Mr. Shepard was
granted a bonus by our Board of Directors of $35,000. Mr. Shepard resigned on January 20,
2009.(2)
    
    Mr. Creamer, our President and Chief Executive Officer receives a salary of $150,000 per year
and is eligible for an annual bonus by our Board of Directors. In December 2008 Mr. Creamer
received a bonus of $15,000. On August 4, 2009, Mr. Creamer was granted options to purchase 1,305,131
shares of common stock at $0.49 per share. Fifty percent of the options vested immediately and
the remaining fifty percent will vest equally over a three year period. The options have a
seven year maturity.  40




---



##### Table of Contents



(3)
    
    Ms. Troska, formerly our Controller was appointed as our Chief Financial Officer in August
2009. She receives an annual salary of $104,000 per year and is eligible for an annual bonus
by our Board of Directors. On August 4, 2009, Ms. Troska was granted options to purchase
261,026 shares of common stock at $0.49 per share. Fifty percent of the options vested
immediately and the remaining fifty percent will vest equally over a three year period. The
options have a seven year maturity.      DIRECTOR COMPENSATION
 Non-Equity
    
    
    NonqualifiedFees Earned or
    
    
    
    
    
    
    
    
    
    
    Incentive Plan
    
    
    Deferred
    
    
    All OtherPaid in Cash
    
    
    Stock
    
    
    Option
    
    
    Compensation
    
    
    Compensation
    
    
    CompensationName
    
    ($)
    
    
    Awards ($)
    
    
    Awards ($)
    
    
    ($)
    
    
    Earnings ($)
    
    
    ($)
    
    
    Total ($)G. Brent Backman
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Eric Balzer
    
    
    4,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,500Joseph Zimlich
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  41




---



##### Table of Contents



ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
  Amount andNature ofBeneficial
    
    
    Percent ofName and Address of Beneficial Owner
    
    Ownership (1)(2)
    
    
    ClassG. Brent Backman (3)
1440 Blake Street, Suite 310
Denver, Colorado 80202
    
    
    10,922,046
    
    
    
    38.97
    %BOCO Investments, LLC (4)
103 West Mountain Ave.
Fort Collins, Colorado, 80524
    
    
    13,386,379
    
    
    
    47.75
    %Sarmat, LLC (5)
103 West Mountain Ave.
Fort Collins, Colorado, 80524
    
    
    1,645,750
    
    
    
    5.87
    %James W Creamer III (6)
1440 Blake Street, Suite 310
Denver, Colorado 80202
    
    
    677,966
    
    
    
    2.42
    %Joni K. Troska (7)
1440 Blake Street, Suite 310
Denver, Colorado 80202
    
    
    146,514
    
    
    
    0.5
    %Joseph Zimlich (8)
103 West Mountain Ave.
Fort Collins, Colorado, 80524
    
    
    344,869
    
    
    
    1.23
    %Eric Balzer (9)
1440 Blake Street, Suite 310
Denver, Colorado 80202
    
    
    112,500
    
    
    
    0.41
    %All Officers and Directors
As a Group (five persons)
    
    
    12,203,895
    
    
    
    43.53
    %
 (1)
    
    All ownership is beneficial and of record, unless indicated otherwise.(2)
    
    Beneficial owners listed above have sole voting and investment power with respect to the shares
shown, unless otherwise indicated. A total of 28,035,694 shares of the Common Stock are considered
to be outstanding pursuant to SEC Rule 13d-3(d)(1). For each Beneficial Owner above, any options
or warrants exercisable within 60 days have been included in the denominator.(3)
    
    A total 10,922,046 shares are owned of record by GDBA Investments, LLC, which is controlled by
Mr. Backman. A total of 5,391,329 were acquired on June 30, 2008 as a result of the conversion of
250,000 shares of convertible preferred stock and $3 million in subordinated debt converted to
common stock. A total of 45,000 shares are owned in the name of adult children of the Mr.
Backman, for which GDBA and Mr. Backman disclaim beneficial ownership.(4)
    
    A total of 9,736,379 shares are owned by BOCO Investments, LLC which were acquired on June
30, 2008 as a result of the conversion of 250,000 shares of convertible preferred stock and $3
million in subordinated debt converted to common stock. Includes warrants to acquire a total of
3,650,000 shares at a price of $.25 per share. The warrants are currently exercisable and expire at
various periods in 2012.(5)
    
    A total of 1,045,250 of these shares are owned of record. A total of 600,500 shares are owned
in the name of family members of the affiliate of this entity.  42




---



##### Table of Contents



(6)
    
    Mr. Creamer has a stock option to acquire a total of 1,305,131 common shares at $0.49 per
share, of which options for 652,566 shares are currently exercisable. An additional 16.67% vests
each succeeding year. The option expires in August, 2016.(7)
    
    Includes 10,000 shares owned of record by Ms. Troska and 6,000 shares owned of record by Ms.
Troskas husband, for which she disclaims beneficial ownership. Ms. Troska has a stock option to
acquire a total of 261,027 common shares at $0.49 per share, of which options for 130,514 shares are
currently exercisable. An additional 16.67% vests each succeeding year. The option expires in
August, 2016.(8)
    
    A total of 344,869 shares are owned by Mr. Zimlich, 316,594 of which were acquired on June
30, 2008 as a result of the conversion of 58,000 shares of convertible preferred shares.(9)
    
    A total of 75,000 shares are owned in the name of an affiliated entity. A total of 37,500
shares are owned in the name of Mr. Balzers son.  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 GDBA Investments, LLC
     BOCO Investments, LLC
   43




---



##### Table of Contents



ITEM 14:
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 ITEM 15.
    
    EXHIBITS FINANCIAL STATEMENT SCHEDULES.
  (a)
    
    (1) FINANCIAL STATEMENTS
   44




---



##### Table of Contents



EXHIBIT NO.
    
    DESCRIPTION3.1 *
    
    Articles of Incorporation, filed under cover of Form 10-SB, 4/14/04.3.2 *
    
    Bylaws, filed under cover of Form 10-SB, 4/14/04.3.3*
    
    Articles of Amendment to Articles of Incorporation, filed under cover of Form 10-SB, 4/14/04.3.4*
    
    Articles of Amendment to Articles of Incorporation; filed under cover of Form 8-K, 7/13/05.3.5*
    
    Articles of Amendment to Articles of Incorporation; filed under cover of Form 8-K, 10/27/063.6*
    
    Articles of Amendment to Articles of Incorporation; filed under cover of Form 8-K, 07/07/084.1*
    
    Warrant for BOCO Investments, LLC, filed under cover of Form 8-K 03/03/094.2*
    
    Warrant for BOCO Investments, LLC, filed under cover of Form 8-K 04/06/094.3*
    
    Warrant for BOCO Investments, LLC, filed under cover of Form 8-K 05/05/094.4*
    
    Warrant for BOCO Investments, LLC, filed under cover of Form 8-K 05/05/094.5*
    
    Warrant for BOCO Investments, LLC, filed under cover of Form 10-Q 9/30/0910.1*
    
    Loan Financing Agreement with GDBA Investments, LLLP, filed under cover of Form 10-SB, 4/14/04.10.2*
    
    Construction Land Acquisition Loan Agreement with Cross Country Properties II, LLC, filed under cover of Form 10-SB, 4/14/04.10.3*
    
    Construction Land Acquisition Loan Agreement with Cross Country Properties III, LLC, filed under cover of Form 10-SB, 4/14/04.10.4**
    
    Lease Agreement between Moody Group, LLC and Family Dollar Stores of Georgia, Inc., filed under cover of amended Form 10-SB, 9/21/04.10.5*
    
    Lease Agreement between Cross Country Properties III, LLC and Advance Auto Stores Company,
filed under cover of amended Form 10-SB, 9/21/04.10.6*
    
    Agreement between GDBA RE One, LLC (Seller) and Alexander V. Lagerborg, filed under cover
of amended Form 10-SB, 9/21/04.10.7*
    
    Letter of Intent dated July 1,2004 between Across America Real Estate Development Corp.
and Carwash Management, Inc, filed under cover of amended Form 10-58, 9/21/04.10.8*
    
    Joint Development Agreement; filed under cover of Form 8-K, 10/06/0410.9*
    
    Agreement to Fund with GDBA Investments, LLLP; filed under cover of Form 8-K, 12/01/0410.10 *
    
    Senior Credit Facility with Vectra Bank; filed under cover of Form 8-K, 4/28/0510.11*
    
    Securities Purchase Agreement filed under cover of Form 8-K, 10/04/0610.12*
    
    Subordinated Note, GDBA; filed under cover of Form 8-K, 10/04/0610.13*
    
    Subordinated Note, BOCO; filed under cover of Form 8-K, 10/04/0610.14*
    
    Shareholders Agreement; filed under cover of Form 8-K, 10/04/0610.15*
    
    Registration Rights Agreement; filed under cover of Form 8-K, 10/04/0610.16*
    
    Revolving Note, GDBA; filed under cover of Form 8-K, 10/04/0610.17*
    
    Revolving Note, BOCO filed under cover of Form 8-K, 10/04/06
  45




---



##### Table of Contents



EXHIBIT NO.
    
    DESCRIPTION10.18 *
    
    Amendment to Senior Subordinated Note, GDBA filed under cover of Form 10Q, 8/14/0710.19 *
    
    Amendment to Senior Subordinated Note, BOCO filed under cover of Form 10Q, 8/14/0710.20 *
    
    Amendment to Revolving Note, BOCO filed under cover of Form 10Q, 8/14/0710.21 *
    
    Amendment to Revolving Note, GDBA filed under cover of Form 10Q, 8/14/0710.22 *
    
    Amendment to Senior Subordinated Note, GDBA filed under cover of Form 10Q, 8/14/0710.23 *
    
    Amendment to Senior Subordinated Note, GDBA filed under cover of Form 10Q, 8/14/0710.24 *
    
    Amendment to Revolving Note, GDBA filed under cover of Form 10Q, 8/14/0710.25 *
    
    Amendment to Revolving Note, BOCO filed under cover of Form 10Q, 8/14/0710.26 *
    
    Amendment to Subordinated Note, GDBA filed under cover of Form 8K, 10/31/0710.27 *
    
    Amendment to Revolving Note, GDBA filed under cover of Form 8K, 10/31/0710.28 *
    
    Amendment to Subordinated Note, BOCO filed under cover of Form 8K, 10/31/0710.29 *
    
    Amendment to Revolving Note, BOCO filed under cover of Form 8K, 12/21/0710.30 *
    
    Amendment to Revolving Note, GDBA filed under cover of Form 8K, 12/21/0710.31 *
    
    Securities Exchange Agreement with BOCO, filed under cover of Form 8K, 07/07/0810.32 *
    
    Securities Exchange Agreement with GDBA, filed under cover of Form 8K, 07/07/0810.33 *
    
    Securities Exchange Agreement with J. Zimlich, filed under cover of Form 8K, 07/07/0810.34*
    
    Revolving Note with BOCO, filed under cover of Form 8K, 07/07/0810.35*
    
    Revolving Note with GDBA, filed under cover of Form 8K, 07/07/0810.36*
    
    Accrued Interest Payment Agreement with BOCO, filed under cover of Form 8K, 07/07/0810.37*
    
    Accrued Interest Payment Agreement with GDBA, filed under cover of Form 8K, 07/07/0810.38*
    
    Accrued Interest Payment Agreement with J.Zimlich, filed under cover of Form 8K, 07/07/0810.39*
    
    Amended and Restated Shareholders Agreement with BOCO and GDBA, filed under cover of Form 8K, 07/07/0810.40*
    
    Extension Agreement with BOCO, filed under cover of Form 8K, 04/06/0910.41*
    
    Amendment to Senior Subordinated Note with BOCO, filed under cover of Form 8K, 10/07/0910.42*
    
    Amendment to Senior Subordinated Note with GDBA, filed under cover of Form 8K, 10/07/0916.1*
    
    Change of Accountant Letter, filed under cover of Form 8K, 04/29/0821.
    
    List of Subsidiaries.23.1
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 *
    
    Previously filed  46




---



##### Table of Contents



CAPTERRA FINANCIAL GROUP, INC.Dated: MARCH 31, 2010
    By:
    /s/ James W Creamer IIIJames W Creamer IIIPresident and Chief Executive OfficerDated: MARCH 31, 2010
    By:
    /s/ Joni K. TroskaJoni K. TroskaChief Financial Officer  Dated: MARCH 31, 2010
    By:
    /s/ Eric BalzerEric BalzerDirectorDated: MARCH 31, 2010
    By:
    /s/ G. Brent BackmanG. Brent BackmanDirectorDated: MARCH 31, 2010
    By:
    /s/ Joseph ZimlichJoseph ZimlichDirector  47